Another Home Sales Record in Houston; Galveston Bay’s Poor Health Report Card


Photo: Marc Longoria via Swamplot Flickr Pool


19 Comment

  • All joking aside, I don’t know anymore what to make of the sales figures. Oil is at record lows, people are being fired by the thousands, yet RE sales are still hitting records and prices are still rising. Was there that much momentum built up that we haven’t seen shit hit the fan just yet? Are we truly now diversified enough to not be affected by oil prices? Is HAR fudging the numbers as they always do?

  • Headlines #3 and #4 can be condensed into one: “Highway to Nowhere Encourages Growth of Sprawl”.

  • Awww, man, when I saw the link “Project To Restore Galveston’s Beaches Kicks Off Today”, I thought maybe TOBA was going to be reinforced and the ugly excess on the west end was going to get plowed under to restore the beach to its pristine barrier island state.

  • I remember going out to eat at Dozier’s in the mid 1970’s in Fulshear. Fulshear was a wide spot on a 2 lane road(Westheimer). I looked them up and they are still in business.

  • @commonsense

    Being in the “Industry” here in Houston, I think the reason why the economy in Houston hasn’t completely collapsed yet is due to denial and easy money. Large oil companies are being propped up by banks. Banks are also heavily investing in startups and smaller oil companies to go out and acquire acreage from distressed sellers. If this downturn lingers too long, it won’t just bring the “Industry” in Houston down, it will bring down the entire Financial sector. A lot of risky bets are being made right now and the flow of money shows no signs of stopping. It’s a bad sign when I am still getting harassed by head hunters every other day when oil is near a 10 year low. We have completely disconnected from reality.

  • From the HBJ article on the Webster development:

    “SpaceWalk will be a signature destination development,” Giusto said. “Space-themed, walkable, pedestrian-friendly and connected. The experience is aimed at fun with creative-themed elements and enhancements.”

    Acres of parking along the freeway is walkable?

  • @commonsense I’d argue its the demographics of the oil industry and who they’ve hired that has things still looking OK in real estate sales. Rental pricing and occupancy is likely the main signal you’d see, as the lack of continued recruitment meant this summer, substantially fewer new engineers and other oil company folks are arriving in Houston looking for an apartment than midsummer in the last 5+ years.

    I think some of the continued sales are people who’ve been laid off, are retiring, or are otherwise leaving for good with the buyers being the pent up demand for inventory from people with 5-10 years experience who’ve become frustrated with constant rent increases, and now finally thinking about buying. Especially at the lower price points on homes closer in and along the energy corridor, I’d presume you’re seeing a lot of first time buyers.

    Or it could still be overseas capital looking for a safe haven…….

  • Re:Sales Figures – We are seeing inventory go up steadily. If that continues, prices will eventually stop rising or even start dropping. But the housing market was in short enough supply 12 months ago when oil was dropping that we can take a big hit to the market and have it still be ‘healthy’. I think total number of home sales will stay high regardless of inventory and pricing, simply because Houston is bigger than ever.

  • @ commonsense: The MSA added 392,000 payroll jobs in 4 years to January 2015 – that doesn’t include self-employed. From 2009 to 2012, our housing construction industry was moribund. Once it became apparent in 2012 that an employment boom was underway, it took time for homebuilders to respond – you can only get lots and houses on the ground so fast. So employment got way, way out ahead of housing construction. Even if employment stopped growing altogether, there is still an overhang in demand in the single family market that will take time to even out. I have been figuring at least through 2015. Both the new and existing home markets should be fairly strong until that point. It’s exacerbated by the likelihood that many of the new residents to the area have been renting, and will be looking to buy a home over the next few years even if our economy stagnates.

  • Missing from the HBJ article is this data from HAR (
    “Sales of townhouses and condominiums increased 7.3 percent in July. A total of 720 units sold compared to 671 properties in July 2014. The average price, however, fell 3.8 percent to $202,991 and the median price declined 3.5 percent to $152,500. Inventory grew slightly from a 2.7-months supply to 2.9 months.”
    The increase in sales volume across the board could mean that people are exiting Houston or downsizing due to layoffs. The only counter-indicator is average/median SF home prices, which could just indicate that more higher-priced homes than middle/low priced homes are being sold overall (i.e. the high-rollers are peacing out).

  • @juancarlos31, it would be very interesting to know how many of last month’s sales were to cash investors. While I agree that there’s some pent-up demand from buyers who can finally get a toehold in this slightly cooler market, I can’t imagine it would account for more than 8,000 sales to people who will actually live in the house. Real estate lags behind other economic indicators by about six months or more, so time will tell.

  • F U L S H E A R

    U F A R S H E L

  • @commonsense I think there are a lot of things going on. Oil companies are a lot smarter now than they were years ago, which means that this slump hasn’t caught all of them with their pants down. If you look at the capex budgets you’ll notice that some of them actually dropped *before* oil prices started dropping. It is in the interest of an oil company to maintain their personnel and equipment as long as they can, otherwise they risk losing them, at a discount, to a company with better cash reserves that can afford to sit and wait. There are already some examples of big oil companies that are in the process of tearing apart the smaller fly by night organizations that weren’t capable of weathering this storm like a pack of vultures. In short, for the smart companies, this (the oil slump) isn’t necessarily a bad thing, it’s the “FIRE SALE EVERYTHING MUST GO” time.
    So that’s one thing happening. Another is that the low prices don’t hurt midstream and downstream as much as you might think. Another is that the real effects of continued low oil prices haven’t REALLY sunk in yet. Another is that a lot of people are banking on the Saudi’s bankrupting themselves in the next year or two which should push prices back up to around 60$ a barrel which is pretty reasonable. Another thing happening is that frakked wells are insanely cheap to run, which means that the break even point for oil is significantly lower than it used to be, which means people can STILL make money on oil at 46$ a barrel (depending on where it’s happening.
    And finally, I woudn’t argue that these numbers actually *are* reassuring. The inventory went from 3 months to 3.7 months, thats a fairly large shift in the wrong direction. Sure we may not be seeing an overnight crash like we have in the past, but that doesn’t mean the market still isn’t correcting, but maybe its more like an old man easing his way into some lukewarm bathwater than some teenager doing a cannonball into a hot tub.

  • RE: Will Metro’s new system get more people to ride?
    After seeing more details, I’m hopeful that more people will ride – it will get them and their cars off of the road. And, for those that ride, it will hopefully be a faster commute than before since a painfully slow bus ride isn’t desirable.
    I’m glad to see that this new network de-emphasizes routing everyone through downtown and operates more on a grid system. Logical and more practical for a city that sprawls.

  • There’s still been a lot of pent up demand to this point and I’m glad we’re still seeing record sales. However, as others have stated inventory is increasing at 0.3/month even with record sales and that gap will only grow now that we’re past prime season. Every neighborhood is flooded with homes at their median price points whether it be 600-700 in the ‘trose, 400 in the heights and 200 in the burbs. We’re still just a year out from the housing market top and layoffs only started 6 months ago, but it’s really just the past month that Houston layoffs have been ramping up. A lot of wishful thinking in the spring with investors hoping to find a bottom but we’re obviously going back to post-recession lows and all companies will be cutting personnel every quarterly reporting to defend their dividends and try to win over investor sentiment for the rest of this year. If it’s a battle of whether Saudi Arabia’s credit rating or the oil companies holds up for longer I’d definitely be putting my money on SA. They’ve cut fuel subsidies as a start and can still rein in their military spending a ton (obviously better than the US will ever be able to).
    This all before having a stock market correction which I think is what really needs to happen to hit the brakes on the housing market. Hard to know when it will come as market has done good job of trading sideways this year, but margins are sticking and growth is looking very elusive at this point going forward. Current buyers are mostly older so you’re going to have to hit peoples stock portfolios for it to really feel like the good times are finally over.

  • A lot of people sat on the sidelines while the housing market went nuts. Now that the market is coming in for a soft landing, people are getting off the sidelines and back into the market. Also, for those who follow mortgage rates, a lot of people are thinking that the Fed will raise rates this fall and are trying to get a mortgage before rates go up.
    The boom is over. It may come back in a few years once OPEC gives up on its battle against shale producers. But there will not be a bust. Supply has been very tight and still is in all segments of housing. Developers have had plenty of warning that the housing boom is ending and are adjusting their expectations accordingly. Houston has finally learned how to live with a boom bust oil market.

  • Where is the Aaron Lay doom’s day article of the month when you need it? Or the Niche prophesying 1982 with instructions to buckle up for the long, hard, and bumpy ride? What has the summer hiatus done to Swamplot?

  • @Joel. There is no way in the world I would bet SA over the major Oil companies. SA is in the current position it is in due to horrendously poor management of capital, both human and fiscal.